There is a severe lack in terms of disbursing money by the distinctive banks, given that there were several sanctions. According to sources, there were long delays in terms of the settlement by several departments of the government. Even that notable PSUs did undermine the ability of MSME for the sustenance of the business cycles. Moreover, PSUs did undermine the small, micro & medium enterprises around the country, according to Nirmala Sitharaman.
The finance minister Sitharaman recently had a meeting with the representatives of the MSME. By the looks of it, the meeting was an integral part of different sessions which Sitharaman came up with. The sessions are going will also feature some of the important stakeholders from around the country on the 11th of August. Sitharaman and the stakeholders would devise plans for the critical sector.
The economy is going through a gradual slowdown
During the announcement, Sitharaman did promise to conduct a study concerning the issue involving government department’s release in delay. Sitharaman also said that she would initial several steps to provide a remedy to the issues. Additionally, the steps would alleviate the MSMEs’ difficulties in the country.
CII Co-chairperson of MSME Committee, Ashok Saigal said that the banks only disburse 10% of the total economy. The scheme also suggests that MSMEs are presently registered right under the GST. On the other hand, they are eligible to grant a loan of 1 crore in just 59 minutes. Moreover, this is possible from the website portal psbloansin59minutes.com.
The problem lies in getting the money back
According to MSME, the CGTMSE gave 70% guarantee to secure the loan amounts, but this did not happen. MSME also said that the turnover/investment policy needs a revision. By the looks of it, the definitions came into being in the year 2006, and now they are up for inflation.
Presently the firms or organizations with a minimum investment of 5 crores are in a small category. Moreover, the firms that deals with investment more than five crores come in the medium category.